2 months ago
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As the Congress authorities successful Karnataka gears up to contiguous the 2026–27 Budget connected Friday, it faces a tightrope locomotion betwixt containing gross shortage and backing its warrant schemes, amid speculation implicit a imaginable alteration of Chief Minister aft the Budget Session.
Chief Minister Siddaramaiah, who besides holds the Finance portfolio, presents his 17th Budget connected Friday.
Women’s empowerment
Mr. Siddaramaiah, who precocious became the longest-serving Chief Minister of Karnataka by surpassing the grounds held by D. Devaraj Urs, has asserted that spending connected the warrant schemes has been a driving unit down women’s fiscal autonomy and sex equality — 1 of the United Nations’ Sustainable Development Goals.
A whopping ₹1.2 lakh crore has been spent connected these guarantees since their inception up to the extremity of January, 2026.
The Bharatiya Janata Party and the Janata Dal (Secular) person accused the authorities of utilizing payment schemes to divert attraction from its alleged nonaccomplishment to make infrastructure and irrigation projects, thereby causing a fiscal strain.
They person besides alleged that taxes and prices of indispensable commodities and services person been raised aggregate times to money these guarantees and safeguard Mr. Siddaramaiah’s position. The Supreme Court precocious chastised State governments for distributing “freebies” indiscriminately without distinguishing betwixt the haves and the have-nots.
Appeal to well-off?
With yearly spending exceeding ₹50,000 crore connected guarantees casting a shadiness implicit semipermanent fiscal sustainability, Mr. Siddaramaiah whitethorn entreaty to comparatively well-off families to voluntarily springiness up definite benefits. The authorities is besides apt to rationalise the fig of beneficiaries nether the warrant schemes to trim non-development expenditure.
The existent fiscal twelvemonth (2025–26) is expected to witnesser a gross shortage of astatine slightest ₹18,000 crore, owing to the rationalisation of the GST and a diminution successful property-related revenues caused by disruptions successful the issuance of e-Khatas successful Bengaluru.
Shortfall successful revenues
The State’s taxation gross stood astatine ₹1,55,405.57 crore arsenic of January, 2026, arsenic against the people of ₹2,08,100 crore for 2025–26. Collecting the remaining ₹52,000 crore successful February and March would beryllium a daunting task, apt resulting successful the downward revision of the Budget size from ₹4,09,549 crore successful 2025–26 to astir ₹3.9 lakh crore.
The State's estimated full liabilities are projected to transverse ₹8.14 lakh crore by March, 2026, amounting to 26.5% of the Gross State Domestic Product (GSDP) – breaching the permissible bounds of 25% mandated by the Karnataka Fiscal Responsibility Act (KFRA), 2002. Only successful 2022–23 and 2019–20 did the liabilities stay wrong the statutory limit.
More taxes likely
To mobilise further revenue, Mr. Siddaramaiah is expected to summation taxes connected fuel, liquor, and spot registration.
